It has nevermissed a delivery and has a reject rate of six parts per millions against a standard reject rate of 150 per million. Ranbaxy, an Indian Pharmaceutical company, manufactures in eight countries and exports its products to 45 countries. Arvind Mills is the world's fifth largest denim producer. Prior to 1991, the idea of Indian organisations becoming world-class producers would have evoked cynicism and derision. Yet, this is precisely what many Indian organisations hope to become in the coming years. The case of Timex, India discussed in the following section is an exciting example of achievement of excellence in world-class manufacturing.

Timex Watches Limited -- A world-class
Indian organisation

Timex Watches Limited was established in 1992 as a joint venture between the Timex group of companies and Titan Industries, which is part of the Tata group of companies. Timex, which is a leading watch company, has about 30 per cent of the market share in the United States. The next largest marketshare is 5.5 per cent. The joint venture was set up with an investment of about Rs 750 million and has a turnover of about Rs 1,000 million. The company has about 20 per cent of the market share in India. Its product range consists of 400 watch styles. It is probably one of the most integrated watch making units in the world. All parts of a watch such as the movement components, plastics, appearance parts, styling parts and watch crystals are made in-house. All the tools and dies that make these components are also made in-house.

The company employs about 700 people. Females, with no formal qualifications, constitute more than half of the workforce. The average age of the workforce is about 23 years. The company's products are sold through franchised showrooms, regional stockists and direct dealers comprising about 4000 sales outlets. The company has an installed annual capacity for one million watch cases. It plans to expand capacity to about three to four million watch cases per year. The company'sfacilities were set up in record time. It took only seven months to start production. Within eight months of the start-up it achieved full capacity utilisation. It took the company six months to make its first precision mould. The best European companies take about 12 to 14 weeks to make a precision mould. Timex Watches can now make a precision mould within six weeks. Only a few countries in Europe, United States and Japan could make these to required standards. Initially, Timex Watches acquired its moulds from the United States or Europe through its promoter in the United States. Now it supplies moulds to its parent company in the United States.

In the global watch industry, for years, Casio, Japan and Timex, Philippines have vied for the top position in terms of productivity and costs. By 1995, Timex, Philippines had achieved the number one position. Timex Watches Limited measured its performance using Timex, Philippines as the standard.

Expensive watches have stainless steel cases, which are costlycomponents. It costs the best European company about US $ 10 for a single stainless steel case. Stainless steel cases cost around US $ 3.50 in Hong Kong. Timex Watches Limited has cut its cost of stainless steel cases to about US $ 2. There are six basic parameters that determine the quality of a watch. Timex Watches Limited ranks highest on all these parameters in India. It also ranks as one of the highest on an international level.

1. Water resistance. Watches are tested for the maximum atmospheric pressure that they can withstand before allowing water to seep into the watch. The best Indian watches can withstand pressures equivalent to about two atmospheres. Most international watches fail under three atmospheres. Timex watches can withstand three atmospheres.

2. Corrosion resistance. Timex watches do not have corrosion problems because they have plastic or stainless steel components.

3. Battery life. Timex's sliver oxide batteries are guaranteed for a minimum of two years and most of them last abouttwo-and-a-half years. Its closest competitor's battery has a life of about one year.

4. Printed circuit board quality. Timex watches rank the highest on this parameter. Its failure rates are very low.

5. Step motor torque. Timex watches have a high torque, which prevents the watch from slowing down, or stopping as it ages or when dust enters the watch or the lubricating oil coagulates.

6. Time-keeping accuracy. The standards for a quartz watch are an accuracy of plus or minus 50 seconds in a month. Ninety per cent of Timex watches conform to an accuracy of plus or minus four seconds a month.

How has Timex Watches Limited achieved this extraordinary performance in a short time? It has been successful because it has systematically managed the critical factors that determine success in the new globally competitive environment. These are factors such as technology, marketing, quality and costs. It has established appropriate structures and systems to manage these critical components. It has invested intraining and development of its staff. Most important, its success is driven by clear values. The key values for Timex Watches are integrity, discipline, teamwork and leading by the right kind of example. It has the right ingredients for success in a globally competitive environment. Can other Indian companies achieve similar success? If backed by similar motivation and thoughtful efforts, who not? We believe that the current competitive environment demands very different skills and competencies compared to the sheltered environment that was characteristic of organisations prior to 1991. We also believe that these skills and competencies can be identified and acquired. But this requires change--change in the way we think about organisations, products and people. Change implies acquiring new ways of thinking and giving up the old. Timex Watches had all the advantages of a new beginning. It could start on a clean slate. For established organisations, acquiring the ingredients for success would involve makingcritical changes. They have to learn the science and art of managing organisational change.

Many organisations around the world have not survived the changes in their business environments. Why have some organisations succeeded while others have failed? The answer is simple. Organisations that have learnt how to manage change effectively have succeeded while those that haven't have become victims of change. How can change be effectively managed?

Unfortunately, this is a very difficult question to answer. Our current understanding of organisational change can give us many useful guidelines but few definitive answers. This hasn't stopped some people from providing consultation on change. Indeed, advising organisations on how to manage change is a multi-million dollar industry. Many consultants offer the same standard solutions or techniques for a variety of change situations.

Sometimes these work but many times, they don't. Sometimes it is also rather difficult to determine if a change strategy ortechnique succeeded or failed because outcomes are not always clear. Occasionally, some organisations, particularly the large ones, try a variety of consultants and techniques in desperation. Again, the results are mixed and it is not easy to attribute success or failure to specific techniques or approaches.

For any manager or administrator in today's world, the most important challenge is learning how to manage and administer in a changing world. This is a challenge because traditional management tools and techniques were developed for a static, not a dynamic, world. Even management education and training has mostly been concerned with teaching people how to manage in a relatively static world. While a few universities and educational institutions around the world have realised the importance of teaching change management skills, most have not. In fact, the way in which management education is structured around the traditional disciplines of marketing, finance, production, human resource management and soon, is a major barrier to learning about organisational change. This is because the phenomenon of change does not belong to any single academic discipline. It overlaps all these yet cannot be completely understood by any single discipline.

Does this mean that it is futile to attempt to learn about organisational change? Not at all. First, it is necessary to acknowledge that management of change is not a fully developed science yet. Despite our limited and incomplete understanding, what we do know about organisational change is enough to lead us to well-informed actions. Our current understanding can alert us to problems, pitfalls, choices, and opportunities in managing change. While we may not always become masters of change, we can at least avoid becoming victims of change. What is it, then, that we know about organisational change? How is our current understanding and knowledge structured? Where does one go if one wants to learn about organisational change?

MANAGING ORGANISATIONAL CHANGE

VNilakant & S Ramnarayan

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